New procedure deduction holiday certificate as from 2024
As from 2024, the procedure for the deduction of the holiday certificate will change. The deduction of the single holiday pay will from now on be processed in 2 phases.
1. Background Belgian holiday legislation and deduction of holiday pay
According to the Belgian legislation on holidays, an employee accrues holiday rights based on his professional performance in the preceding calendar year. The calendar year during which the employee takes his holidays is referred to as the holiday year. The preceding calendar year, during which the entitlement is accrued, is referred to as the holiday reference year. These holiday rights include an entitlement to paid holidays (“single holiday pay”) and the annual additional holiday allowance (“double holiday pay”).
For example, based on the employment in 2023, an employee will accrue such a holiday entitlement for calendar year 2024.
2. Set-up until holiday year 2023
Because of this particular set-up, when a white-collar employee changes employer, he will receive “departure holiday pay” from his previous employer. This departure holiday pay includes an “advance” payment of the holidays accrued but not yet taken and the accrued double holiday pay. This may concern the current holiday year as well as the next holiday year.
The previous employer will provide the employee with a holiday certificate, detailing the amounts of the departure holiday pay. The employee will subsequently hand over the holiday certificate to the new employer. The new employer will grant the employee paid holidays and double holiday pay but will also deduct the departure holiday pay as paid out by the previous employer.
Until now this deduction was processed in one go, usually in the month of May of June. Often this resulted in a very low net salary for the employee in the month of deduction, which was disadvantageous to the employee and in some cases, contrary to the Remuneration Protection Act of 12 April 1965.
3. New procedure as from 2024
Only the procedure for the deduction of the single holiday pay will change.
The method for the deduction of the double holiday pay will not change. The calculation and deduction of the double holiday pay will still happen in one go in the month in which the employee takes his main holiday (in practice this is usually processed in May or June).
This change only affects white-collar employees. There is no change for the holiday payment for blue collar employees as they receive their holiday pay directly from the competent Holiday Fund.
For an employee changing status from blue collar employee to white collar employee, the new rules will also be applicable.
As from 2024 the holiday attestation deduction will be processed in 2 phases.
Phase 1: each time an employee takes a holiday
Each time an employee takes a holiday with his new employer but accrued with the previous employer, the employee will receive his normal monthly salary but with a deduction of 90 % of the fixed salary for the holiday(s) taken during that month. In other words, the employee will receive only 10 % of his fixed salary for the holidays taken in that month.
Phase 2: December (or at the end of the employment contract)
In December (or at the moment of departure, if the employee leaves in the course of the year) the final settlement of the single holiday pay will be made. This final settlement will take into account the amounts of the single holiday pay of the holiday certificate but will also consider the amounts that have already been deducted in the course of the year when the employee has taken holidays (i.e. deduction of 90%).
The result of the final settlement can be a reimbursement or a deduction.
Previously, the deduction of the amounts of the holiday certificate was limited to the level of the current salary with the new employer. This rule is maintained in the new regulation.
4. Example of the new rules
An employee works full time with employer A from 1 January to 31 December 2023. On 1 January 2024 he starts working full time with employer B.
Employer A
During 2023, the employee earned a total annual gross salary of € 57.200. Upon departure, he has received the following departure holiday pay from employer A:
- Single holiday pay: € 4.387,24 (= € 57.200,00 x 7,67 %)
- Double holiday pay: € 3.889,60 (= € 57.200,00 x 6,8 %)
- Additional double holiday pay: € 497,64 (= € 57.200,00 x 0,87 %)
The holiday certificate includes the above amounts and is handed over to the employee who provides this document to his new employer.
Employer B
The employee is entitled to take 20 legal holidays in 2024 with employer B based on his employment in 2023 with employer A.
The fixed monthly salary of the employee with employer B is € 4.800,00
The employee will take:
- 4 holidays in March
- 10 holidays in August
- 6 holidays in November
Phase 1:
- March: 4 holidays taken (21 working days in March)
The employee will receive his fixed monthly salary of € 4.800,00, but with a deduction of € 822,86 (= € 4.800,00 / 21 days x 4 holidays x 90%)
- August: 10 holidays taken (22 working days in August)
The employee will receive his fixed monthly salary of € 4.800,00, but with a deduction of € 1.963,64 (= € 4.800,00 / 22 days x 10 holidays x 90%)
- November: 6 holidays taken (21 working days in November)
The employee will receive his fixed monthly salary of € 4.800,00, but with a deduction of € 1.234,29 (= € 4.800,00 / 21 days x 6 holidays x 90%)
Phase 2:
In December, the employee will receive his fixed monthly salary of € 4.800,00
The single holiday pay according to the holiday certificate amounts to € 4.387,24
During the year, € 4.020,79 has already been deducted (€ 822,86 in March, € 1.963,64 in August, € 1.234,29 in November).
Final settlement: the remaining amount of € 366,45 (= € 4.387,24 minus € 4.020,79) still needs to be deducted in December 2024.
5. Information to the employee
The new law envisions that the employee should be informed clearly about the departure holiday pay and the way in which it will be deducted with the new employer:
- The new rules have to be mentioned clearly on the holiday certificate;
- At the request of the employee, the employer has to provide the employee with a clear overview of the calculation of the final settlement;
- Via the monthly pay slip of December (or month of departure) the employer has to inform the employee of the reimbursement or deduction made.
The necessary mentions will be added to the holiday certificate and the monthly pay slip (if necessary).
Action points
In order to enable us to apply the new legislation, we need the holiday certificates of the previous employer for the employees who have started in 2023 and 2024. Your Payroll Business Partner will contact you if we are still missing holiday certificates for the employees who have started in 2023 and 2024.
Going forward, when a new employee starts his employment, please provide us with holiday certificate at the start of the employment.
